Embraer Gets $2.1 Bln Worth Order For 50 E175 Jets From Republic Airways

(RTTNews) - Embraer S.A. (ERJ) and Republic Airways Holdings Inc. (RJET) announced a contract for the sale and purchase of 50 firm E175 jets. The value of the firm order is estimated at $2.1 billion, based on 2014 list prices. The firm order will be included in Embraer's 2014 third-quarter backlog.

The aircraft will be operated for United Airlines under the United Express brand. Deliveries are scheduled to begin in the third quarter of 2015 and extend until 2017.

This contract is in addition to the order signed by Embraer and Republic in January 2013 for 47 firm and 47 option E175s - 34 of which have already been delivered. In addition to the new order, Republic maintains 32 options for E175s.

Embraer stated that the transaction is in connection with the transfer of Q400 turboprop airplanes currently operated by Republic Airlines to UK's carrier Flybe Limited. Concurrently, Flybe and Embraer have agreed to reduce by 20 the outstanding order for 24 E175's the airline has on order backlog.

Therefore, the net increase to Embraer's backlog in the third-quarter will be 30 E175 jets.

Earlier today, Flybe Group PLC (FLYB.L) and Embraer agree to terminate twenty E175s from Flybe's firm order backlog of twenty four E175s.

Flybe has agreed with Republic to sublease twenty four 71-seat Bombardier Q400 turboprop aircraft, with deliveries commencing in March 2015 and spread over a two year period.

Embraer has agreed to defer delivery of Flybe's firm order of four remaining E175s until 2018, in line with Flybe current fleet planning needs.

The Q400 aircraft being sub-leased by Flybe have an average age of 5.4 years and will have an average sub-lease period of 4.6 years at March 2015. Their delivery schedule fits Flybe's fleet replacement and growth profile as twenty one Bombardier Q400s from the existing Flybe fleet come to the end of their lease periods over the next four years.